Wall Street: Less Gloomy Than it Seems

Lately, the market seems to have gotten a bad rap. People are downright gloomy and I’ve read a number of articles saying “the end is near.”

But, in looking at a chart of the S&P, I don’t see it. To the contrary, the market just broke from short-term congestion and is making new yearly highs.

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The “end” may well be near, but for now the bulls remain in control.

You can’t go five minutes these days without someone talking about Facebook (NASDAQ:FB). Ever since it came out, my advice was to stay away from it: I just didn’t have enough information (from the chart) to say if it was a good or bad bet. And “bet” is accurate, because I think the company is still too new to tell if it can justify its valuation.

But now, I’m starting to have second thoughts, primarily because there’s almost universal contempt for the stock. Beyond that, typically when stocks of this volatility -- think stocks like Netflix (NASDAQ:NFLX) -- drop 30% from recent highs, it’s a good time to buy. If you use the June highs, FB has done that, and it may be time to weigh in.

Again, this is pure speculation and a buy certainly isn’t justified via the charts. On the other hand, if you’re patient, it may pay off.

Maybe the polar opposite of FB is Procter & Gamble (NYSE:PG). I noticed Warren Buffett was dumping it, but I still like it (and own it). For new purchases, you might wait for a break above resistance. Once it does that, it should make a nice run.